Dairy Talk

Jim Dickrell is the editor of Dairy Today and is based in Monticello, Minn.

Dairy Still the Center of Farm Bill Debate

Jan 25, 2013

A Texas food policy analyst says the No. 1 reason we don’t have a farm bill is John Boehner’s absolute opposition to supply management.

Just like in farm bills past, dairy is at the center of the 2012-slash-2013 farm bill.

Never mind that dairy programs account for "just" $432 million of the Congressional Budget Office’s (CBO) 10-year baseline cost of $995 billion. Everyone argues the hang-up is food stamps, which account for $772 billion. Even crop insurance commands $90 billion of the baseline and conservation $65 billion.

So dairy’s contribution is a paltry 0.04%. It’s a flea on a fly on an elephant’s backside. CBO has also "scored" the National Milk Producer’s Dairy Security Act at just $107 million over five years, which would make dairy programs just 0.02% of the farm bill cost.

And yet dairy remains the key reason the 2012 farm bill didn’t come to the floor of the House of Representatives last year, says Joe Outlaw, co-director of the Agriculture Food Policy Center at Texas A&M. "Dairy is the reason the farm bill has been held up," he says. Outlaw spoke at the Southern Dairy Policy Conference in Atlanta last week.

Outlaw is in a position to know. He and his co-workers have provided the Senate and House Ag Committees with numerous sets of analysis of how various farm bill provisions would play out at the farm level. In dairy, he works with 22 panel farms in 10 states to develop detailed budgets. He is then able to use that information to gauge how various farm bill provisions would impact cash flows and farm profitability.

He’s on the speed dial list of numerous House and Senate Ag committee staffers, and they’ll call him at any hour to get information. As a result, Outlaw is in a unique position to know what’s driving the farm bill debate.

"The No. 1 reason we don’t have a farm bill is Congressman John Boehner (R-Ohio), who has publicly stated his absolute opposition to supply management," says Outlaw. As Speaker of the House of Representatives, Boehner is in a pretty good position to decide if the farm bill moves forward—or not. "It’s not about the money involved, but the philosophy," says Outlaw.

So what will happen? Congress still has two choices. The first would be to pass the 2013 farm bill with the current version of the Dairy Security Act that includes market stabilization for those producers who sign up for the margin insurance program. The second option is to pass the Goodlatte-Scott amendment that reduces the amount of production covered by margin insurance but also strips out the market stabilization component.

"Congress either needs supply management to keep the costs under control, or if they don’t, costs of the program skyrocket because there’s nothing to restrain production," he says.

"My gut feeling is that we’ll get something closer to Goodlatte-Scott" he says. "But as soon as it costs too much, they will ratchet it back."

There’s a chance Congress will again take up the farm bill prior to the next round of budget reduction negotiations in March. More likely, he says, it will get done a few days before the end of the fiscal year in September when the current extension of the farm law expires.

Read more here on why the House of Representatives must debate the farm bill and the Dairy Security Act.